Innate immune recognition of the single stranded RNA (ssRNA) virus and induction of a strong antiviral immunity play a critical role in the outcome of hepatitis C virus (HCV) infection. Alcohol consumption contributes to inflammation, innate immune defects, and HCV-induced progression of liver disease. HCV interacts with immune cells in the liver through interactions between HCV-infected hepatocytes or in the circulation in the form of infectious virus particle or its abundantly produced viral proteins. HCV represents danger signals for the host through Toll like receptor 7 and 8 that recognize ssRNA, TLR3 that senses dsRNA or TLR2 that is activated by HCV core and NSS proteins. These TLRs are expressed in immune cells and in hepatocytes but little is known about the role of interactions between HCV infected hepatocytes and innate immune cells such as monocytes and dendritic cells (DC) in the pathomechanism of HCV infection. Our studies demonstrated that chronic HCV infection as well as alcohol treatment results in increased monocyte pro-inflammatory activation but impaired IFN production by plasmacytoid dendritic cells. Therefore, we hypothesize that HCV and alcohol, individually and together, interfere with antiviral host defense at the level of viral recognition receptors and by subverting pivotal functions of monocytes and dendritic cells. We propose that interaction of innate immune cells (monocytes, macrophages, dendritic cells) with HCV-infected hepatocytes modulates their function and/or phenotype to result in impaired innate and adaptive immunity. We hypothesize that HCV-mediated signals play a role in HCV-induced alterations in dendritic cells (mDCI, mDC2, pDC) and contribute to the reduced T cell responses in HCV infection by induction of CD4+CD25+ regulatory T cells. The Specific Aims of this proposal are: 1. To determine the effect of alcohol exposure and HCV on the function and phenotype of monocytes and macrophages, 2. To investigate mechanisms by which alcohol modulates myeloid Type I dendritic cell-mediated defects of T cell activation in chronic HCV infection, 3. To evaluate the effects of alcohol on IFN-lambda in HCV infection, 4. To assess the effect of TLR-mediated/HCV-induced signals in altering dendritic cell functions.